This paper studies the impact of homeless encampments on residential property values with a novel procedure that infers the presence of encampments using citizenmade complaints about them. I find that 58% of residential properties transacted in Los Angeles between March 2016 and August 2022 had homeless encampments within 0.3 miles and sold on average for 3.14% less than they otherwise would have, a total realized loss of over $2.5 billion across more than 70,000 properties. I use the realized losses on property transactions to price the citywide externalities associated with homeless encampments at $32.4 billion, more than double the projected cost of housing all 31,000 people living on the streets of Los Angeles. Pricing the externalities from homeless encampments leads to a more thorough accounting of the costs associated with homelessness, not just for those experiencing it, but for all residents of cities that struggle to contain it.
What is the Cost of Homeless Encampments to a City’s Residents? Evidence from Los Angeles
Dani’s Reading Notes
Year: 2024